Apollo to Open Hospitals in Mumbai and Bengaluru Following Advent Investment Deal

Apollo HealthCo is set to open three new hospitals in Mumbai and Bengaluru, announced its parent company on Thursday, following a recent investment deal with private equity firm Advent International.

Apollo HealthCo will establish two hospitals in Mumbai, each with a capacity of 500 beds, requiring an investment of approximately Rs 2,000 crore. Additionally, a hospital with 400-500 beds will be built in Bengaluru. In April, Advent agreed to invest Rs 2,475 crore in Apollo HealthCo, a subsidiary of Apollo Hospitals Enterprise Limited (AHEL). AHEL received Rs 890 crore from the deal, earmarked for “organic and inorganic expansion,” according to a statement.

Expanding in Mumbai and Bengaluru aligns with AHEL’s long-term strategy to invest around Rs 3,000 crore over three years to add 2,400 beds. "In all urban locations, we are looking at 400- to 500-bed facilities. The investment in Mumbai will be around Rs 2 crore per bed, and we will be coming up with two 500-bed hospitals in Mumbai," said Krishnan Akhileswaran, chief financial officer of AHEL.

Additionally, Keimed, a wholesale distribution company owned by the Apollo Group promoters, will merge with Apollo HealthCo. "The merger is going to take 24 to 30 months. Apollo 24x7 will also become neutral to profitable in the next six to eight quarters," Akhileswaran noted, referring to the company’s pharmacy business. "When that happens, HealthCo itself will be a large business. With the addition of Keimed, we are talking about a Rs 25,000 crore business, which should be an integrated pharma distribution company in three years. We have set a path of making it a profitable operation."

AHEL reported a consolidated net profit of Rs 258 crore for Q4 of the financial year 2023-24, marking a 77 percent rise compared to Rs 146 crore in the same quarter the previous year. "Overall, the business has done well. Revenue saw a 15 percent growth. We have achieved almost a 31 percent growth in EBITDA and a 77 percent increase in PAT (profit after tax), driven primarily by profitability in (Apollo) HealthCo and AHLL. HealthCo has turned around from losses to an overall profit situation, and the overall profit of AHLL has also improved, while healthcare has continued to maintain its momentum."

Akhileswaran emphasized that HealthCo is on track to achieve profitability in the online segment within the next six to eight quarters. "Going forward, Apollo Hospitals will continue to strengthen its endeavours to identify and introduce best-in-class, technology-enabled healthcare solutions to enhance patient outcomes and improve access to quality care. Together, we embark on a journey towards a healthier, more resilient future, where every individual receives the highest standard of care," said Prathap C. Reddy, chairman of Apollo Hospitals Group.

BS